Article review of “Hotel property performance: The role of strategic management accounting”: for advanced management accounting study

Article review of “Hotel property performance: The role of strategic management accounting”: for advanced management accounting study

 

How to present this article in Harvard reference format?

Turner, M.J., Way, S.A., Hodari, D. & Witteman, W., 2017. Hotel property performance: The role of strategic management accounting. International Journal of Hospitality Management, 63, pp.33–43. https://doi.org/10.1016/j.ijhm.2017.02.001

 

What are the key research issues the article wants to address?

The key research issues the article aims to address are:

1.    Investigating the key determinants (precursors) of hotel property strategic management accounting (SMA) use, particularly focusing on the role of business strategies such as market orientation.

2.    Examining the impact of hotel property SMA use on customer performance and financial performance.

3.    Illuminating the mediating effect of SMA usage and customer performance on the relationship between market orientation business strategy and financial performance in hotel properties.

4.    Addressing the lack of empirical evidence in the hotel industry regarding how business strategies influence SMA use and how SMA use affects performance outcomes.

These issues stem from the identified gaps in prior literature, which have noted the potential but understudied role of SMA in enhancing competitiveness and performance of hotel properties consistent with their business strategies and competitive demands

 

Describe two main theories employed in this article.

The article employs two main theories:

1.    Contingency Theory: This theory posits that there is an optimal design of management control systems that best fits a firm's strategy, resulting in optimal performance. Management control systems, including accounting practices, should be tailored to support the business strategy to enhance competitiveness and performance. The study applies contingency theory to examine the fit between hotel property business strategies and the use of strategic management accounting (SMA), highlighting that hotel properties may adapt management control systems from corporate groups to local contexts to better suit their strategic needs.

2.    Strategic Management Accounting (SMA) Theory: SMA evolved to address deficiencies in traditional management accounting by providing more external, long-term, forward-looking, and strategic information about customers and competitors to aid strategic decision-making. SMA includes techniques such as customer accounting, competitor accounting, benchmarking, and strategic pricing. The article draws on SMA theory to explore how its use by hotel properties relates to their strategic choices and performance outcomes, emphasizing the link between strategy, SMA usage, and improved customer and financial performance.

These theories form the foundation for the study's conceptual framework linking business strategy, SMA use, and performance in the hotel industry.

 

Describe 3 main claims of the article in terms of Toulmin's model of argument.

Using Toulmin's model of argument, which includes Claim, Grounds (Evidence), and Warrant (the link between grounds and claim), the article presents three main claims as follows:

1.    Claim 1: Hotel property market orientation business strategy positively influences the use of strategic management accounting (SMA).

• Grounds: Empirical evidence from a sample of 80 hotel properties shows that properties with a stronger market orientation business strategy are more likely to employ SMA techniques. This is supported by contingency theory, which suggests management control systems (including SMA) align with business strategy for optimal performance.
• Warrant: Since market orientation focuses on gathering and using customer information and responsiveness, this orientation necessitates more strategic and forward-looking accounting information provided by SMA to enhance decision-making.

2.    Claim 2: The use of strategic management accounting by hotel properties positively affects customer performance and financial performance.

• Grounds: The study's results indicate significant positive associations between SMA use and customer satisfaction, service quality, and retention (customer performance), and also between SMA use and financial outcomes. Prior literature corroborates that SMA techniques such as customer profitability analysis and strategic pricing improve competitive advantage and financial results.
• Warrant: SMA provides enhanced external and strategic information that helps managers make better decisions to improve customer relationships and profitability, thereby improving both customer and financial performance.

3.    Claim 3: Hotel property customer performance mediates the relationship between SMA use and financial performance.

• Grounds: Conceptual and empirical findings in the article suggest that improved customer performance due to SMA use leads to better financial performance, consistent with service-profit chain theory linking customer satisfaction and loyalty to profitability.
• Warrant: Satisfied customers drive loyalty and repeat business, which translates into improved financial results; hence, customer performance acts as an intermediary channel between SMA use and financial success.

These claims collectively argue that market-oriented strategy leads to SMA use, which in turn enhances customer and financial performance, with customer performance serving as a key mediator.

 ** references:  a collection of management accounting notes; a useful generative AI tool./ also consider another generative AI tool.